ECONOMY-WIDE BENEFITS FROM ESTABLISHING WATER USER-RIGHT MARKETS IN A SPATIALLY HETEROGENEOUS AGRICULTURAL ECONOMY

Xinshen Diao (), Terry Roe and Rachid Doukkali

No 12971, Bulletins from University of Minnesota, Economic Development Center

Abstract: This paper analyzes the economy-wide gains obtainable from the allocation of surface irrigation water to its most productive use, and evaluates a decentralized mechanism for achieving this result in a spatially heterogeneous environment. The focus country for the analysis is Morocco. The analysis is based on a general equilibrium model that, in addition to the rest of the economy, captures 83 agricultural production activities, 66 of which are in seven separately identified water districts that span the entire country. The results suggest that a decentralized water trading mechanism could increase agricultural output by 8.3 percent, affect the rental rates of other agricultural inputs at the national level, including labor, and have economy-wide effects that entail modest declines in the cost of living, an increase in aggregate consumption, and expansion of international trade.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 34
Date: 2002
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Economy-wide benefits from establishing water user-right markets in a spatially heterogeneous agricultural economy (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:umedbu:12971

DOI: 10.22004/ag.econ.12971

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